Agreement for the G20 on the crisis
June 24, 2010
The G20 members are expected to reach agree on a comprehensive strategy to end the crisis and growth during their meeting in Toronto, said Olli Rehn, judging exaggerated the differences on these issues from both sides of the Atlantic.
In a interview with Reuters, the Commissioner of Economic and Monetary Affairs, further stated that the risk of another recession is very low and the European banking system is much stronger than what is perceived although pockets of vulnerability "might emerge.
"I think our differences have been exaggerated (…) We have a good chance to reach an agreement on a comprehensive framework for growth, with a coordinated budget strategy for ending the crisis," he said.
"From the American side, many believe that Germany and the European Union rushed to fiscal consolidation. This is not the case.In fact the European fiscal stance remains as stimulation and is not overly restrictive, "he added.
As Jean-Claude Trichet on Monday he considers that priority should be for Europeans to restore consumer confidence and investors in the ability of states to meet their deficits and debts.
In one movement, he also considers that the risk of another recession is "very low" and that the real economy recovers in Europe.
"This is another progressive and moderate rebound but it will strengthen later this year and we should have a safe environment instead of next year," he said, while acknowledging that several EU Member States – Spain, Portugal, Greece – continue to face situations that are particularly "fragile".
BANKING SYSTEM SOLID
Finally, on the stress tests on the major European banks, he expressed confidence in the fact that the exercise will demonstrate the strength of the European banking sector.
"My view is that generally the European banking sector is stronger than some of the design.And in the case of pockets of vulnerability, so we have stabilization funds available for national and EU to address risks recapitalizations, "he says.
Last Thursday, at the EU summit, the Heads of State and Government of Twenty-Seven had decided to conduct a second wave of resistance tests and publish the results of bank to bank by mid-July.
He also expressed confidence in the fact that Slovakia, the new coalition government has cast doubt on his willingness to sign the agreement on the financial stability of European Facility 750 billion, ends with s' run.
"There were contacts between the leaders of Slovakia and the European leaders and I feel that the political message was received in Bratislava," he said.
Finally, Olli Rehn welcomed China's decision last weekend to restore some flexibility to the yen but said that the implementation of this decision would benefit the Chinese economy and reduce global imbalances.
"I think the Chinese authorities are aware of the needs of the Chinese economy which, in my view, coincide with the needs of the global economy," he said.
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